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BU / Business Management / OM 323 / Define the Scope of Operations Management.

Define the Scope of Operations Management.

Define the Scope of Operations Management.


School: Boston University
Department: Business Management
Course: Operations & Technology Management
Term: Spring 2017
Tags: operations
Cost: 50
Name: Operations Management Boston University MIDTERM STUDY GUIDE
Description: Operations Management Boston University MIDTERM STUDY GUIDE
Uploaded: 02/28/2017
30 Pages 311 Views 0 Unlocks

*What alternatives are there?

What does product and service design do?

What Is Operations Management?

What Is Operations Management?  goods - are physical items that include raw materials, parts, subassemblies such as motherboards that go into computers, and final products  such as cell phones and automobiles.  services- are activities that provide some combination of time, location, form, or psychological value.  Operations Management — the management of sysWe also discuss several other topics like What is the difference between macroevolution and microevolution?
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tems or processes that create goods and/or provide services.  Supply Chain— is the sequence of organizations — their facilities, functions, and activities— that are involved in producing and  delivering a product or service. Suppliers’ —> Direct Suppliers—> Producer—> Distributor—> Final Customers  Supply chains are both external and internal. External: raw materials, parts, equipment, supplies, and/or other inputs to the  organization, and they deliver outputs that are goods to the organization’s customers  Internal: supplying operations with parts and materials, performing work on products, and/ or performing services. The creation of goods or services involves transforming or converting inputs into output. Transformation Processes (storing, transporting, repairing)   Takes measurements at various points in the transformation process (feedback) and then compares them with  previously established standards to determine whether correction action is needed (controL).  Relatively few pure goods or pure services, companies usually sell product packages, which are combination of goods and services.  Essence of the operations function is to add value during the transformation process:  Value-Added is the term used to describe the difference between the cost of inputs and  the value or price of outputs.  (In non profits—it’s value to society)  Degree of Customer Contact— Many services involve a high degree of customer  contact.  Labor Content of Jobs — Services often have a higher degree of labor content than  manufacturing jobs do.  Uniformity of Inputs — Service Operations are often subject to a higher degree of  variability of inputs. Manufacturing have more control overhear their inputs, more  uniform.  Measurement of Productivity —  Quality Assurance —  Inventory —  Wages — Ability to Patent — Primary Factors to consider:  a. Forecasting and capacity planning to match supply and demand   b. Process management   c. Managing variations   d. Monitoring and controlling costs and productivity   e. Supply chain management   f. Location planning, inventory management, quality control, and scheduling  Include the exchange of information and cooperative decision making  Process Management — A process consists of one or more actions that transform inputs  into outputs.   1. Upper Management — govern the operation of the entire organization   2. Operational Processes — these are the core processes that make up the value  stream   3. Supporting Processes — these support the core processes  Managing a Process to Meet Demand   ideally the capacity of a process will be such that its output just matched  demand.  Process Variation   1. Variety of goods or services being offered — the greater the variety of  goods and services, the greater the variation in production or service requirement.   2. Structural variation in demand - predictable   3. Random variation — natural variability   4. Assignable variation — cause by defective inputs, incorrect work  methods, out-of-adjustment equipment and so on.  Can be costly and disruptive to company  Measure via standard deviation and mean  The Scope of Operations Management   Forecasting:   Capacity Planning:   Locating Facilities   Facilities   Facilities and Layout   Scheduling   Managing Inventories   Assuring Quality   Motivating and training employees  Managing the Supply Chain to achieve schedule, cost and quality goals   Assembly Operation: buying components from suppliers  Fabrication work:  System design = involves decision that relate to system capacity, the geographic location  of facilities, arrangement of departments and placement of equipment within physical  structures, product and service planning and acquisition of equipment. Determines  many of the parameters of system operation.  System operation = involves management of personnel, inventory planning and control,  scheduling, project management, and quality assurance. (tactical and operational  decisions)  Purchasing - has responsibility for procurement of materials, supplies, and equipment.  Industrial Engineering- is often concerned with scheduling, performance standards  work methods, quality control, and material handling.  Distribution - involves shipping of goods to warehouses, retail outlets, or final  customers  Maintenance- is responsible for general upkeep  Chapter 4. Product and Service Design   Introduction   What does product and service design do?   The various activities and responsibilities of product and service  design include the following (functional interactions are shown in parentheses)  Reasons for Product and Service Design or Redesign     Economic   Social and demographic   Political, liability, or legal   Competitive   Cost or Availability   Technological  Idea generation : Reverse engineering — dismantling and inspecting a competitor’s  product to discover product improvements   Research and development (R&D) — organized efforts to increase scientific  knowledge or product innovation   Basic Research - has the objective of advancing the state of knowledge about a  subject without any near term expectation of commercial applications  Applied Research has the objective of achieving commercial applications   Development converts the results of applied research into useful commercial  applications  Legal and Ethical Considerations   Product liability is the responsibility of a manufacturer for any injuries or  damages caused by a faulty product because of poor workmanship or design.  Uniform Commercial Code product carry an implication of merchantability  and fitness that is, a product must be usable for its intended purposes    ETHICS:   Produce designs that are consistent with the goals of the organization.   Give customers the value they expect.   Make health and safety a primary concern.  Human Factors:    Cultural Factors:  Global Product and Service Design:  Virtual Teams can provide a range comparative advantages over traditional teams such  as engaging the best human resources from around the world without the need to  assemble them all in one place, and operating on 24 hour basis decreasing the time-to market  Degree of Newness -   1. Modification of an existing product or service   2. Expansion of an existing product line or service offering   3. Clone of competitor’s product line or service offering   4. New product or service  Quality Function Deployment is a structured approach for integrating the “voice of the  customer” into both the product and service development process.  House of Quality - correlational matrix is usually constructed for technical  requirements; this can reveal conflicting technical requirements.  The Kano Model — is a theory of product and service design developed by Dr. Noriaki  Kano, a Japanese professor, who offered a perspective on customer perceptions of  quality different from the traditional view that “more is better”.   Three types of Quality:   Basic— customer requirements that have only a limited effect on  customer satisfaction if present, but lead to dissatisfaction if not present.  Performance- customer requirements that generate satisfaction or  dissatisfaction in proportion to their level of functionality and appeal.   Excitement- refers to a feature or attribute that was unexpected by the  customer and causes excitement (wow factor).  PHASES IN PRODUCT DESIGN AND DEVELOPMENT    *Feasibility Analysis   *Product Specifications   *Process Specifications   *Prototype Development   *Design Review   *Market Test   *Product Introduction   *Follow-up Evaluation  Service Blueprinting   conceptualizing a service delivery time, method describing and analyzing a  service process   Design Capacity: The maximum output rate or service capacity an  operation, process or facility is designed for.   Effective Capacity: Design Capacity minus allowances such as personal  time, and maintenance.  System Effectiveness —-  Efficiency = actual output / effective capacity *100%  Utilization = actual output / design capacity * 100%  Determinants of Effective Capacity   Facilities   Product and Service Factors   Process Factors   Human Factors   Policy Factors   Operational Factors   Supply Chain Factors   External Factors  Capacity cushion — which is an amount of capacity in excess of  expected demand when there is some uncertainty about demand. Capacity cushion -  capacity - expected demand.  Capacity alternatives may involve step costs - which are costs that increase stepwise as  potential volume increases.    Multiple break-even quantities may occur possibly one for each range.  Process Selection   Process types   Job Shop: low volume of high-variety goods   Batch: moderate volume of goods or services     Repetitive:   Continuous:   Project:      Production Lines: Standardized layout arranged according to a fixed sequence of  production tasks.  Assembly lines: Standardized layout arranged according to a fixed sequence of assembly  tasks.  U-Shaped Layouts = increased communication BECAUSE workers are clustered  facilitating teamwork.  Nonrepetitive Processing: Process Layouts - layouts that can handle varied processing  requirements.  Line balancing - the process of assigning tasks to workstations in such a way that the  workstations have approximately equal time requirements.  Cycle time— help determine how many stations to use- the maximum time  allowed at each work station to complete its set of tasks on a unit.  Minimum cycle time is equal to the longest task time. (Bottleneck)  Maximum cycle time is the sum of all the task times.  These establish the the potential range of output.  Output Rate = (operating time per day / cycle time)  Cycle Time = (operating time per day / desired output rate)  Theoretical Minimum Number of Stations = (Sum of Task Times / Cycle  Time)  The Percentage of Idle Time = (Idle Time per Cycle / (Nactual * Cycle Time) * 100  Efficiency = Nactual * Cycle Time - Idle Time / Nactual * Cycle Time * 100  Job Design — involves specifying the content and methods of jobs.   What will be done in a job, who will do the job, how the job will be done, and  where the job will be done  Specialization — describes jobs that have a very narrow scope  Behavioral approaches to job design: Quality of Work Life  Job enlargement: giving a worker a larger portion of the total task, by  horizontal loading (the additional work is on the same level of skill and responsibility as  the original job. Make the job more interesting by adding variety of skills required and  by providing the worker with a more recognizable contribution to overall output)  Job rotation: workers periodically exchange jobs.   Job enrichment: increasing responsibility for planning and coordination  tasks, by vertical loading.   (where workers are cross-trained to be able to perform a wider  variety of tasks; lean operations)  Motivation  Teams (Self-directed teams/Self-managed teams)  Ergonomics - incorporation of human facets in the design of the workplace)  Quality of Work Life   Working Conditions  Compensation Time-based systems — hourly and measured daywork  systems compensate employees for the time the employee has worked during a pay  period (salaried employees)   Output-based (incentive) systems — compensate employees  according to the amount of output they produce during a pay period, thereby tying pay  directly to performance. Individual Incentive Plans - straight piecework where worker’s  pay is a direct linear function of his or her output. Group incentive plans, which stress  sharing of productivity gains with employees for output and for reductions in material  and other costs.  Knowledge-based systems — a pay system used by  organizations to reward workers who undergo training that increases their skills.   3 parts: Horizontal skills - variety of tasks worker is  capable of performing; vertical skills = managerial tasks worker is capable of; depth  skills = quality and productivity results.  Management compensation  Recent trends  Motion Study— is the systematic of the human motions used to perform an operation.  Purpose is to eliminate unnecessary motions and to identify the best sequence of  motions for maximum efficiency (Frank Gilbreth)  Therbligs — basically elemental motions. Break jobs down into basic elements and base  improvements on an analysis of these basic elements  Location:  profit potential  Consider Supply chain: centralized or decentralized distribution  Location options   expand existing facility   add new locations while retaining existing ones   shut down at one location and move to another   do nothing   Global Locations - facilitating factors: Trade Agreements (lower barriers to  trade) - Technology  Benefits:   Markets   Cost Savings   Legal and Regulatory   Financial   Other    Disadvantages:   Transportation costs   Security Costs   Unskilled labor   Import restrictions   Criticisms   Productivity  Risks  Political   Terrorism   Economics   Legal   Ethical   Cultural   Quality  Identifying a Country  Government   Cultural Differences   Customer Preferences   Labor   Resources   Financial technological  Market  Safety  Identifying a Region   Location of Raw Materials: Necessity, Perishability, Transportation costs   Location of Markets   Labor Factors   Other Factors i.e. climate & taxes  Identifying a Community    Identifying a Site  Locational Cost-Profit-Volume Analysis  Factor Rating —general approach to evaluating locations that includes quantitative and  qualitative inputs   establish a composite score   General Steps:   1. Determine which factors are relevant   2. Assign a weight to each factor that indicates its relative importance compared with  all other factors   3. Decide on a common scale for all factors and set a minimum acceptable score if  necessary   4. Score each location alternative   5. Multiply factor weight by the score for each factor, and sum the results for each  location alternative  6. Choose the alternative that has the highest composite score, unless it fails to meet  the minimum acceptable score   In some cases manager may prefer to establish minimum thresholds for  composite scores— if alternative fails to meet that minimum they can reject it without further  considerations  The CENTER OF GRAVITY METHOD   to determine the location of a facility that will minimize shipping costs or travel time to  various destinations, location planning for distributions centers, where the goal is typically to  minimize distribution costs.  When number of units to be shipped is not the same for all destinations, a weighted average must  be used to determine the center of gravity, with the weights being the quantities to be shipped.    Ch. 9: Management of Quality, pp. 245-247 (“Quality Certification”)  How Sustainability Fuels Design Innovation, pp. 617-625  Concurrent Engineering - bringing design and manufacturing engineering people  Environmental factors  Slide 1:  Stage One: Identify target market; customer input Develop product concept & design Stage Two: Supply Chain design, process flow, layout, capacity Estimate sales & margins; investment and expense plan Stage Three: Detailed designs- Information systems, promotion, & financial plan Queues, aggregate production plan, inventory, quality Stage Four: Integration: final business planPresentation to investors & manager  Integration of Supply Chain — Product/Service The 5 M’s of Operations 1) Manpower — People; internal workers and consultants, advisors, etc. 2) Materials — Inventory; raw material, work-in-process, finished goods 3) Machinery — Equipment; machines and tools 4) Methods — Processes and Policies; how work is done 5) Money — Capital; BudgetsSlide 2a:  OM: “the science of  getting things  done” Ethical issues in product design choices   *Is there an ethical dilemma   *What alternatives are there?  *Who are the stakeholders? How are they affected by the decision?  Customers (friends and family)   Employees & Shareholders  Suppliers *Does our mission or vision statement, culture, or laws direct us? *Mission: what our firm does – our current purpose  Vision: What our firm aspires to be   Culture: What we assume or believe we should or should not do   Laws: External requirements for what we must do or may not do  *Ethical theories may guide us Slide 2b:  Target CostingManufacturing Target Costing $10.00 Retail Price for Widget   - 5.00 Estimate 50% for Channel Margin   = $5.00 Net Sales Price to Team (revenue)   - 1.00 G&A (20%)   - 1.00 Sales and Marketing (20%)   - .50 Pre-Tax Profit (10%)   = $2.50 Target Cost available for COGS   (30% Mfg. Overhead, 70% Direct Labor and Materials) Braun Case?  Slide 3: Quality Function Deployment  Communication is essential  HOUSE OF QUALITY  * the basic design tool of QFD  *captures the voice of the customer  *helps with cross-functional planning and communication  Building the House Slide 4: Product and Service Design  Reasons for Product Design or Redesign  Market Opportunities or Threats  • Economic  • Social & Demographic  • Political, Liability, or Legal  • Competitive  • Cost or availability  • Technological  •  Who designs and develops products and services?  *Marketing   *Design  *Manufacturing / Operations  How to assess NPD Performance?   Product/Service Quality  Product/Service Cost  Development Time  Development Cost  Development Capability  Development Challenges  Trade-offs  Dynamics  Details  Time Pressure  Economics What is “Sustainability”?   “Development that meets the needs of the present without compromising the  ability of future generations to meet their own needs”  Sustainable designs and operations… Reduce the use of non-renewable materials, energy, and water and the production  of pollution and waste Re-use and recycle materials, energy, and water where possible and economical  Business Reasons for Change   Enhance corporate image and revenue   Reduce costs through more efficient use of resources   Avoid liability and negligence penalties   Comply with government regulations   Improve community relations   Improve employee health, safety, and morale  Cradle–to-Grave Assessment  (Aka Life Cycle Analysis)   This is the assessment of the environmental impact of the product throughout its  useful life   - From raw material extraction or growth  - Through fabrication of parts and assembly  - Through use or consumption  - To final disposition at the end of a product’s useful life  Try to reduce, reuse, and recycle  Sustainable Design  Value Analysis: dematerialize, simplify, replace   Recycling: recovering materials for future use   Remanufacturing: refurbishing used products by replacing worn-out or defective components   Design for Disassembly (DFD): designing products so that they can be easily taken apart  Efficient use of resources   Energy, Water, Materials  Reduction of Waste by-Product   Metal shavings, VOC’s, Chemicals, Oils Control of Emissions   Carbon monoxide and dioxide   Sulfur dioxide and mercury  Reduced Use of Resources for Logistics   Reduce transportation, handling, weight  ISO 14000   Voluntary set of worldwide standards on environmental management   Objective:   (Compatible with ISO 9000 quality standards)  Requires periodic inspection by outside auditors to maintain certification  ISO 247000   Similar to ISO 1400 but applies to products containing re-manufactured components   Requires product specifications and performance to be “equivalent to” new  Eppinger’s Key Points   * Quality movement from “sustainability costs more” to “we can  save money”   *Companies often start with operations, then realize most of the   wastes are designed in - it’s a materials problem.   *It’s not how much you use, it’s what you use - Cradle-To-Cradle   Thinking   *Not necessary to start with a detailed life cycle assessment; you   know where the biggest problems are  *Doesn’t need to happen all at once, little by little  Design for Operations   Taking into account the ease of producing and delivering the service, or the  fabrication and/or assembly in product design, which is important for: Cost  Productivity  Quality  Old “Over the Wall” Approach    Concurrent Engineering  Bringing design and operations together early in the  design phase to simultaneously develop the product and  process. Information Technology (e.g. CAD) is an important  facilitator of concurrent engineering, but the  organizational elements are the toughest.  Advantages of Standardization  Fewer parts to deal with in inventory & manufacturing  Reduced training costs and time   More routine purchasing, handling, and inspection procedures   Product is immediately available to customers   Opportunities for long production runs and automation  Disadvantages of Standardization   Decreased variety results in less consumer appeal   Designs may be frozen with too many imperfections remaining   High cost of design changes increases resistance to improvements  Mass Customization   The large scale production of customized goods and services enabled by:   Postponement - or delayed differentiation (designing a product  or process to delay the point of differentiation until as close to the customer as  possible.)   Modular design (grouping of component parts into  subassemblies that are easily replaced or interchanged- allows quick assembly  for customization, simplification of mcfg and assembly, and easier diagnosis and  remedy of failures.)  Component Commonality:   Using the same part in multiple products to…  Reduce inventory   Increase bulk discounts   Simplify design training  Robust Design  A design which is both durable and can be used under many different types  of conditions.  Reverse Engineering   The dismantling and inspecting of a competitor's product to discover  product ideas and improvements Differences between Services and  Products  Services are intangible,  which leads to… 1. Services cannot be made and inventoried ahead of time, so… 2. They are created and delivered simultaneously and usually in the presence of  the customer, so… 3. It’s hard to schedule customer arrival which leads to high demand variability  hour-to-hour and difficult capacity utilization issues; but “self-service”  can help, and… 4. Locations convenient to customers and the experience of being served (facility  ambience, server behavior) matters a lot  5. Many services have low barriers to entry and exit due to low capital requirements  and difficulty in patenting services Slide 5: Process Flow Analysis  Process a mean for converting various inputs (land, labor, capital, information) into  outputs (goods and services)  Process Flow Diagram:  Work center: people and/or equipment that perform a task  Setup time: time to prepare or clean up for the task; independent of the # of jobs in the  batch  Run time: time required to perform the task  Time standards: the expected amount of time to perform a task  Throughput time: time for each unit to pass through the process, including waits  Cycle time: time between job completions; the rate at which items are produced  Weighted Average:  Sometimes we use a weighted average:   mix is 50% item a, 30% item b and 20% item c   cycle time item a=20 sec.; b=50 sec.; c = 80 sec.  20 sec. x .5 = 10 sec.   50 sec. x .3 = 15 sec.   80 sec. x .2 = 16 sec.   41 sec.  Capacity: the ability to process work; expressed in units of output or time  Logan airport: landings / takeoffs per day  HMO doctor: hours per week  Ford plant: cars per month Capacity (in units) = time available / cycle time  Capacity utilization = capacity required / capacity available  Bottleneck: the work center with the least capacity; limits system capacity (i.e., defines  the cycle time)  Balance: when capacities of different work centers are similar  Yield: percent of good items ( = output quantity / input quantity )  Scrap rate: percent of bad items ( = 1 – yield ) Process Flow Analysis Key Points  Process flow analysis terminology and concepts  Set-up time v run time (fixed v variable cost components)   Bottleneck → cycle time → capacity → utilization  Using labor time, labor rates, and yield to calculate costs per unit output   Throughput time v cycle time   Scrap rate and yield   Be prepared for test problems Practice: 16 problems in the Process Analysis Note plus Ch.6 #1, #5abc  Slide 6: Capacity Planning  Capacity is the upper limit or ceiling that an operating unit can  handle  (measured in # units)  Importance of Capacity Decisions  Impacts ability to meet future demands  Affects operating costs  Major determinant of initial costs  Involves long-term commitment  Affects competitiveness  Affects ease of management  Design Capacity (dreamy)  Maximum output under ideal conditions  Effective Capacity  Maximum capacity given product mix, maintenance, breaks, and other doses of  reality Actual output (reality)   Rate of output actually achieved — cannot exceed effective capacity  Efficiency = Actual Output / Effective Capacity  Utilization = Actual Output / Design Capacity  Developing Capacity Alternatives   Forecast demand and current capacity    Identifying the Optimal Operating Level   Production Units have an optimal rate of output for minimal cost Cost- Volume Analysis Capacity Costs Often Occur in Steps w/ Multiple Break-Even Pts.  Financial Analysis   Cash Flow   Present Value Capacity planning in services??? Do wee need to know this?  Practice problems: Chpt. 5 # 1, 2, 5, 8, 9  Slide 7: Location  Why make location decisions?   New company   Expand markets or adjust to shifts   Accommodate grow in demand   Reduce costs   Depletion of resources   Mergers and acquisitions  Process for Making Location Decisions     1) Decide on the criteria   2) Identify the important factors   3) Develop location alternatives   a. Identify a country   b. Identify a general region   c. Identify a small number of alternatives   d. Identify site alternatives   4) Evaluate and make selection  Factors When Selecting a Country   Government   Labor   Resources   Financial incentives   Market potential   Cultural differences   Safety  Regional Factors     Location of Raw Materials   Location of Markets   Cost and Availability   Taxes  Climate  Community Considerations   Taxes and environmental regulations   Enticements (tax abatements, low cost loans)   Attitude toward type of business   Quality of life (schools, cost of living, recreation)   Services (medical, fire, police)   Cost and availability of utilities  Site-Related Factors  Land (cost, conditions)   Room for future expansion   Transportation (access roads, rail spurs)   Zoning restrictions   Customer-presence   Convenience, distance   Parking   Driving, transportation   Attractiveness   Crime, disorder, etc.  Evaluating Locations:      CENTER OF GRAVITY METHOD  Minimizes actors such as costs, distance, response - or - travel time  Can include customers, suppliers, or both   = ∑ xW i i = ∑ yW x∑ i i ∑ cg W i Factor Rating—  ycg W i  Incorporates qualitative and quantitative factors in a single weighted value Considerations:  Nearness to raw materials is not usually a consideration  Customer access is a  Prime consideration for some: restaurants, hotels,  etc.  Not an important consideration for others: service call centers, etc.  Tend to be volume & revenue driven, and so are  Concerned with demographics, competition, traffic volume patterns, and  convenience  Clustering  Similar types of businesses locate near one another Strategic: understand what is most  important to your company’s distinctive way  of competing Practice problems: Chpt. 8, #11, #12, #13  Slide 9&10: Facility Layout and Job Design  First step in layout design: selecting your process type     Layout is arranging your process flow within a facility     First you must choose your “process type”  PROCESS TYPES  VVaorluiProject: “One of a kind” work in a limited time  emtye Job Shop: Small scale, highly flexible  Batch: Moderate volume, moderate variety  Repetitive / Assembly Line: High volume, standardized goods or services  Continuous: Very high volume, standardized non-discrete goods  The Product-Process Matrix  Where you place departments, work centers, and equipment  Reasons for design of layouts include: A. New facility or new products  B. Inefficient operations  C. Accidents, safety hazards, or morale problems  D. Changes in methods or equipment, the design of products, the volume or  mix of products, or environmental or legal requirements Product Layout (Sequential) - Used for repetitive processing e.g. assembly  line  STATION 1   —> STATION 2   —>    STATION 3  Advantages:  High utilization of specialized labor and equipment  Low material handling cost and WIP inventory  Routine scheduling, accounting, and inventory control  Low unit cost  Process Layout (Functional)   Used for intermittent processing (e.g. job shop)   Dept. A Dept. C Dept. E   Dept. B Dept. D Dept. F  Advantages:   System can handle a variety of processing requirements   Not particularly vulnerable to equipment failures   General purpose equipment often less costly   Possible to use individual incentive systems  Fixed Position Layout   The product remains stationary   Workers, materials, and equipment brought to it  U-SHAPED PRODUCT LINE -  Service Layouts: Two key factors:  Customer contact   Degree of customization  Layouts:   Warehouse storage layouts   Retail layouts   Office layouts  JOB DESIGN    SPECIFIES the content and methods of jobs    What will be done (the tasks)  Who will do what (division of labor)  How the job will be done (methods and motions)  Where the job will be done (layout)  Two Philosophies: Efficiency and Behavioral  Efficiency Approach to Job Design   Emphasizes specialization   Utilizes:   Methods analysis   Motion study   Work measurement  SPECIALIZATION   advantages…  For mgmt: for labor:  1. simplifies training 1. Low education and skill requirements  2. High productivity 2. Minimum responsibilities  3. Low wage costs 3. Little mental effort needed  Behavioral approaches to job design   Emphasize employee motivation   Job enlargement—   Giving a worker a larger portion of the total task (horizontal loading)  Job Rotation   Having workers periodically exchange jobs    Job enrichment   increasing responsibility for planning and coordination tasks (vertical loading)  BASES FOR COMPENSATION Time-Based (hourly or annual salary)   easier to administer   more common   Can lead to slacking/ “free rider”     Output-based (incentive)   proven to increase performance   individual or group based   Harder to administer; less common   Knowledge-Based (least common)  Ethical issues:  Compensation:  Shareholder profit-maximization versus “living wage”; flex- and part-time v quality  of worklife  Job design:  Efficiency approaches can be de-skilling and create boring jobs that are easily  outsourced  Behavioral approaches may “over-promise” the job autonomy, task variety, and  scope  Practice problems: Chpt. 8, #11, #12, #13

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